SLO County home sales are off to a hot start in 2025. Will it hold up?
California’s housing market enjoyed a strong month in February that saw home sales reach their best rate in the past two years — but is it a sign of a healthier market, or just a flash in the pan?
In San Luis Obispo County, the housing market has gotten off to a decent start this year, California Coastal Real Estate Realtor Graham Updegrove said.
Coming out of the “sluggish” winter season that typically sees an overall decline in home listings and sales, the first two months of the year saw both sales and listings spike — but this is typical for the first months of spring, as buyers get out of the holiday season and back into house-hunting mode, Updegrove said.
In San Luis Obispo County, median home prices stayed as strong as ever, reaching $968,000 — 1.3% higher than this time last year — but the real story of the market in the early months of 2025 is told in the county’s sales and listing figures, which enjoyed some of the same boost as the rest of the state’s market, according to the most recent housing market data provided by the California Association of Realtors.
In February, home listings improved by 26.5% compared to this time last year, with a total of 410 homes listed in the county. As a result, sales saw a 7.6% year-over-year increase, with 154 San Luis Obispo County homes closing escrow in February.
“We are starting to see more active listings on the market, which is a good thing in general, but I think sellers are still trying to capture those prices that are as high as they possibly can, and that’s generally more likely to happen (in) that spring to summer selling season,” Updegrove said.
Realtor: Market instability may be on horizon
While the market has generally gotten off to a good start in 2025, Updegrove said there are some doubts about whether instability in the stock market in the past month will allow for continued growth in sales and listings.
Udpegrove attributed some of the initial sluggishness of the winter months to potential buyers waiting to see how the presidential election played out.
Since then, the market has dealt with more economic uncertainty than usual; tariffs on Canadian, Mexican and Chinese imports have been introduced and paused several times in the past two months, causing markets to drop and turning up fears of a recession, Updegrove said.
So far, the impact on housing prices has been negligible due to the uncertain status of the tariffs, but if they’re in place long-term, those economic fears may be justified, Updegrove said.
“Excluding labor, if the material cost goes up as a result of the tariffs, then yes, eventually consumers will see higher prices as a result,” Updegrove said. “All things being equal with market conditions, there’s a bottom line effect to a builder by paying more for materials, and that generally does get passed on to a homebuyer.”
Which SLO County markets performed the best?
In the city of San Luis Obispo, home prices were up 4.8% from February last year, reaching a median price of $1.2 million on 26 sales — itself an increase of 8.3% over that time. Listings in the county’s namesake city were up 4.4% year-over-year, with a total of 47.
To the north, Paso Robles’ prices reached a median of $755,000, down 6.2% from February 2024.
Paso Robles led all markets with 95 home listings — 39.7% more than last February — and saw an 8.3% increase in home sales with a total of 31.
Prices were higher in nearby Atascadero, reaching $915,000 in February and rising 20.8% from the previous year. Atascadero was one of the few markets that saw a decline in listings — a decrease of 17.9% for a total of 32 — and saw a 31.8% year-over-year drop in sales as a result, ending the month with 15.
Grover Beach was the sole South County city that saw a decline in median price, falling by 1.2% from this time last year and ending February at $840,000.
A total of seven homes were sold in Grover Beach — the same as last February — while listings were up 33.3% with a total of 12.
Nearby, Arroyo Grande and Pismo Beach both posted median prices north of $1 million, reaching $1.34 million and $ 1.45 million respectively.
Arroyo Grande saw a 59.1% increase in listings with a total of 35, but it saw its sales slip year-over-year with a total of 14.
Pismo Beach was a different story, with 19 listings showing a 17.4% decline from February last year and just six sales, down 25% over that time.
On the coast, Morro Bay home listings saw a significant boost, with 27 listings constituting a 107.7% increase from last February. Sales similarly accelerated by 100% over that time for a total of 10, though the median price fell 17.7% to $885,000.
Will strong sales, listings hold up?
Updegrove said as the summer arrives, sales should pick up, benefiting from the higher-than-usual number of listings hitting the market.
Though nothing is guaranteed, a decline in interest rates closer to 6% by the end of the year is a relatively realistic expectation, Updegrove said.
With mortgage rates holding steady in the mid-6% range for the past year — 6.65% as of March 27 — only a significant disruption of the market will realistically cause prices to fall in San Luis Obispo County, Updegrove said.
“Hopefully by the end of the year, we’re kind of in that high 5% to low 6% range, which should theoretically allow a few more buyers to be able to buy, to increase that kind of affordability factor — assuming that prices don’t keep rising by double digits,” Updegrove said.
